Qantas Group future cloudy as revenue nosedives and losses accumulate

first_imgQantas Group announced today a $646 million Underlying Loss Before Tax of AUD $646 million and a Statutory Tax Loss of AUD $2.8 billion.The statutory figure is significantly higher than analysts and the aviation community predicted and is primarily due to a one-off write-down of the company’s old Boeing 767 and Airbus A330 and A380 planes. The Group’s revenue dropped AUD $566 million over the 2013-14 financial year and fuel costs amounted to AUD $4.5 billion.Qantas Group concluded that here has been a AUD $440 million total transformation benefit from its cost cutting program.AUD $900 million in transformation projects are currently being undertaken and the airline believes that AUD $600 million of those benefits will be realised in Financial Year 2015.The Group’s unit costs are down by 3 per cent and restructuring and redundancies ($428 million) and primarily non-cash costs relating to early aircraft retirements ($394 million) are recognised in the statutory loss.In terms of the Group’s fleet age, the average is 7.7 years and seven fully owned aircraft have been added since the start of Financial Year 2014.Following the Structural Review of its operations, Qantas Group is looking to sell off non-core assets to reduce its debt with airport terminals and property in the firing line and no new Jetstar ventures will be established.Qantas Group chief executive office Alan Joyce said that the future horizon is positive.“After an extremely difficult period, we are focused on building momentum with our turnaround in FY15,” Mr Joyce said.“Our cash balance and liquidity position is strong, and the Group’s overall financial performance is rapidly improving, we are removing costs to drive earnings growth and the work we’ve done over recent years to renew our fleet and improve service has been recognised with a string of awards and record customer satisfaction,“In February we made a deliberate choice to continue investing in core initiatives for customers in order to hold our competitive position, keep our brands strong and maintain a yield premium in a challenging market, as we transform our business at pace, our airlines are providing better service than ever,“The structural decisions we announce today give the Group maximum scope to attract capital in a fiercely competitive international aviation market.”Qantas International and Qantas Domestic are likely to be separated so that the International can attract more foreign investment in future, however, no decision has been made.Source = ETB News: Tom Nealelast_img read more